We distinguish between two types of entrepreneurs. We call them warriors and philosophers. Of course no one is 100% one of the two, but in every person one of the two qualities is dominant.
The warrior simply loves the daily battle of winning customers, negotiating with suppliers 'to the bone', squeezing costs out of processes and keep the organization "lean and mean" all day. They are genuinely energized by this role and see it as a game and they constantly seek the limits of what is acceptable to their environment.
The philosophers see their role as entrepreneur certainly has the ambition to be profiable as much as the warrior. He realizes that it is a neccesary condition for continuity to begin with, but he also sees his entrepreneurial life as a means to achieve a "higher goal". It is not on us to judge the definition of higher and lower; the only important thing is that they perceive it to be a higher goal. They have two objectives: (1) ensure the right of existence of the company by making sure the company contributes to a significant improvement of part of society and (2) personally grow as a person (again according to their own definition) by the learning experiences derived from the role they play.
So both are in it for themselves and to us there is nothing wrong with that. It is just so that the emphasis of their personal ambition is different.
Let's take the example of a global internet software company with a clear for-profit objective. When you ask the warrior to define the mission of the company he will come up with something like "we are the most competitive, successful and profitable organization in our industry by maximizing value to our customers and minimizing costs at the same time. We are frugal and agile and will do whatever it takes to dominate our market."
When you ask the philosopher the same question, he will come up with something like "it is our ambition to rule out global poverty by democratizing advanced technology in a profitable manner."
We don't say either one is better than the other. They are just different and both can be very successful and both can build very strong cultures. The culture built by the warrior will resemble an army and the culture built by the philosopher will have more traits of a common ideal. Both build success on the basis of the bondage of a team through a common objective and belief.
Nowadays the philosopher type of entrepreneurs seems to gain popularity. Many start-ups have high social ambitions, regardless of the fact that they are profit driven. You can think of all 'energy and food sustainability' related start-ups, but also all initiatives in social media with at least initially unclear business models solely aimed at adding users, not paying customers.
The interesting thing though is that there are times that even the philosopher has to fight. Actually it happens more often than you might think. These more idealistically driven companies usually tend to challenge existing rules, business-wise, but also socially and politically. Therefor they better prepare for resistance to change from unexpected angles. This is an issue, because these type of entrepreneurs and companies have the fighting mode not embedded in their reflexes.
That throws up the question when to fight and when to withdraw?
There are clear conditions when the philosopher must go to war:
- He is attacked by the old school competitors, driven by inertia, with the only aim to weaken him so much that he will fail in his ambition. These kinds of attacks are usually based on formalities. Our advice is simple:
- Seek cooperation with the old school competitors and try to make them part of your ambition. You will be highly successful when you succeed in teaming up with the old school in defining the new school. It will help you dramatically in your scalability.
- With any member of the old school that refuses the offer and shows aggressive behavior towards you, switch to full armor and fight. Some will ignore you, which is fine. The fact that they show signs of aggression at least gives the impression that they have reason to be afraid. Build on your self-esteem that you represent the succeeding business model. This implies that you have the power to hurt them if you have to (you may not realize it though, because you may be small and they may be big). Just don't hurt them more than necessary.
- On top of that, in most cases that market is big enough for you to succeed anyway. Focus on building your business not on fighting your competitors, but on aligning with your customers. Remember the objective: the fastest way to become the new mainstream is to get access to the mass-market. One way is through alliance with the current mainstream. When you can lever on their access to market, you boost your growth rate at a fraction of your scheduled marketing expenditure. Keep repeating your willingness to cooperate while being assertive on implementing your own plan.
- Never waste more time or money than strictly necessary on formal and legal discussions. Only lawyers make money this way. All others loose. Pick your fight carefully. It is very well possible that the legal system is not yet adjusted to your new way of thinking. Probably your odds are better by fighting commercially than legally any way. Sometimes you must (when attacked from the legal side, you have to protect yourselves), but even then make sure that as soon as possible the marketplace becomes the center stage of your fight again. That is where you have to win in the end anyway.
- The philosopher has to fight as well when confronted with skepticism. The fight is from a different nature though. The skeptics are not necessarily against the objectives of the philosopher. They just have their doubts with concern to the relevance of the objective and its feasibility. Actually the skeptics can become the most active fellow thinkers, once convinced.
There are also clear conditions when the philosopher has to withdraw. Actually mainly one: when it turns out that he is lonely in his ideal and then he is a dreamer. That can be very admirable and sympathetic, but it will not build a company.
July 2014 | Version 1.0 by Yohyon van Zantwijk